Any concerns? We have very nearly completed repaying my education loan – how can I avoid overpaying?

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Any concerns? We have very nearly completed repaying my education loan – how can I avoid overpaying?

We frequently get inquiries via our sites. We try not to offer advice, but we attempt to signpost to sourced elements of further support and information. A number of the replies could be beneficial to other people, therefore sometimes we are going to upload them anonymously as ‘question and solution’ news things. We now have gotten a relevant concern recently from an educatonal loan debtor who has payday loans Indiana got very nearly completed repaying their education loan.

Please be aware – this is certainly published as a ‘news’ item, this means the information and links aren’t evaluated and updated. You shouldn’t depend on it without checking the total facts of the Student Loans Company to your case or a income tax adviser. </em>


I’ve nearly completed repaying my Arrange 1 education loan. I’ve read within the media that borrowers will get by themselves overpaying their loans which clearly i will be keen in order to avoid. Exactly what do i actually do to stop this from taking place?


We realize that this is a typical issue and the one which both borrowers therefore the scholar Loans Company (SLC) like to avoid. Unless you are working abroad, you will definitely repay your student loan(s) through the income tax system whether you spend through Pay while you Earn (PAYE) or through Self Assessment. Overpayments can happen to the final end of repaying the mortgage as a result of timing variations in sharing information between HMRC, who’re gathering the loan repayments, therefore the SLC whom administer the loans. Nonetheless, HMRC in addition to SLC will work towards more regular information sharing which ideally should reduce this issue taking place later on. Tax Guide for pupils describes just just how student loan repayments are determined and exactly how the repayments are formulated through the taxation system.

For the time being, then there are some actions you can do to prevent overpayments from happening if you are coming to the end of repaying your student loan.

  • If you’re about 2 yrs from fully repaying your student loan(s) it is possible to contact the SLC and inquire to get rid of repaying your loans through PAYE and alternatively proceed to making repayments straight to the SLC through monthly direct debits. We realize that just a third of borrowers choose for direct debits as well as the SLC are keen to encourage more borrowers to do this because it should avoid overpayments.
  • Make certain that the SLC has up-to-date contact information so that they’ll contact you if you need to. The SLC should monitor borrowers’ reports with a view to determining when you’re getting near to repayment that is full. If you should be nearing the termination of your repayments chances are they will contact you to definitely provide to modify one to direct debit repayments.
  • You will have to know that when you have fluctuating earnings, as an example you work overtime or get bonuses, then it might be hard for the SLC to find out once you may be nearing complete payment. You might contact the SLC to ask to be relocated to a debit repayment plan that is direct.

Then there are a few points to be aware of if you do move to direct debit repayments:

  • Failure to steadfastly keep up with direct debit repayments will imply that you will definitely be moved right back to repayments through the PAYE tax system.
  • Whenever changing your work, you need to be expected to perform a brand new beginner list that may ask you if you’re repaying your figuratively speaking. On concern 11 make certain you state so you will end up paying twice and overpayments will occur that you are repaying your student loan directly to the SLC by direct debit otherwise HMRC will start deducting repayments through PAYE.

When you yourself have already overpaid you then should contact the SLC as quickly as possible and guarantee they usually have your proper bank details. But be skeptical of every phishing e-mails or telephone calls from fraudsters pretending to function as the SLC!

For more information on repaying student education loans see our start to see the pupil loans part in Tax Guide for pupils.

Contact: Claire Thackaberry (be sure to utilize kind at e mail us) or follow us on Twitter: @litrgnews

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